Geithner: GOP Will Be Blamed If No Cliff Deal

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During their appearances on Sunday talk shows today, Treasury Secretary Timothy Geithner betrayed more than a whiff of self confidence that the administration held the upper hand in the stalled talks with Republicans over the fiscal cliff, while House Speaker John Boehner continued to sputter that he again felt misled by President Obama over the direction of these crucial talks.

In opening comments on "Fox News Sunday," Geithner was almost condescending in noting that Boehner and other Republican leaders are "really in a difficult position" and that "they're going to have to figure out their politics of what they do next" in response to Geithner's offer on Thursday that included $1.6 trillion of fresh tax revenue by raising rates on the wealthiest two percent of Americans.

Obama favors extending the expiring Bush era tax cuts to everyone but taxpayers earning more than $250,000 a year. The Republicans oppose any increase in tax rates, saying it would hurt the economy, and instead argue in favor of capping popular tax deductions and write offs to generate roughly $800 billion of revenue over the coming decade-- or just half of what the president says is needed.

“There’s not going to be an agreement without rates going up,” Geithner said on CNN’s “State of the Union," and Republicans will “own the responsibility for the damage” if they “force higher rates on virtually all Americans because they’re unwilling to let tax rates go up on 2 percent of Americans.”

"And I don’t really see them doing that," Geithner, who is leading the Obama administration’s fiscal cliff negotiations, said on NBC’s "Meet the Press."

Boehner, meanwhile, continued to voice dismay and shock that Geithner and the administration pulled the rug out from under him by laying down a plan containing far more tax increases than spending cuts and entitlement reform as well as never discussed proposals for new stimulus spending.

In his interview on the same network," Boehner called the administration’s plan “non- serious” and said he was “flabbergasted” when Geithner presented him the proposal in a closed meeting at the Capitol last week.

“I looked at him and I said, ‘You can’t be serious.’” Boehner said the administration “actually asked for more revenue than they’ve been asking for the whole entire time.”

Precisely why the speaker was surprised that the administration might suddenly shift gears on him is something of a mystery. His secret talks with Obama over a major budget and deficit reduction package as part of a deal to raise the debt ceiling in the summer of 2011 blew up after Obama at the last minute pressed for higher tax hikes than the two men had been discussing.

Senate Minority Leader Mitch McConnell said he wanted changes to safety-net programs that focus on changing eligibility requirements, and suggested that if Democrats agreed, both sides could move closer to a budget deal to avert the fiscal cliff.

In an interview, with The Wall Street Journal, McConnell said if the White House agrees to changes such as higher Medicare premiums for the wealthy, an increase in the Medicare eligibility age and a slowing of cost-of-living increases for programs like Social Security, Republicans would agree to include more tax revenue in the deal, though not from higher tax rates.

While both sides fear being blamed if a deal isn’t reached before the end of the year, a new poll from CNN/ORC shows that 45 percent of the public would blame congressional Republicans – even though the Democrats control the Senate – while just 34 percent would blame the president. Moreover, polls show that more Americans side with the president than the GOP over whether wealthier taxpayers should have to pay higher rates to deal with the deficit. All of this helps to explain Geithner's relative cockiness on a slew of Sunday talk shows.

“Those rates are gonna have to go up. That’s an essential part of any deal,” Geithner said on ABC’s This Week.”

There is general agreement that the government should commit to about $4 trillion in savings over the coming decade, which would be achieved through a combination of spending cuts, tax increases and reforms of the federal tax code and entitlement programs. But there is almost no unanimity how to get there.

Apart from the $1.6 trillion of new tax revenues, Obama’s road map include roughly $350 billion to $400 billion of additional savings from Medicare and other health insurance programs. The rest of the savings would largely be achieved by taking credit for the $2.1 trillion of long term savings agreed to in August 2011 as part of a deal to raise the federal debt ceiling by $2.1 trillion to its current $16.4 trillion level.

Asked today whether he would accept those previous cuts as part of a new Grand Bargain, Boehner told Fox that "it could be part of the package if they want to count it," but the Republicans would insist on trillions of dollars more of long term savings. Boehner also said the president's call for giving him primary responsibility for raising the debt ceiling in the future -- with Congress able to object, if it chooses, by passing a resolution of disapproval subject to a presidential veto -- was a non-starter.

Boehner also insisted that Congress and the administration can raise all the revenue they needed by imposing caps on the amount of deductions that wealthier Americans could claim. But once again, he refused to identify even one deduction that he and other Republicans would be willing to eliminate.

Democrats insist that the government couldn't raise all the additional revenue it needs by capping deductions, and note that it would be politically difficult to eliminate or minimize the effects of the biggest and most popular deductions -- including those for charitable deductions, home mortgage interest and employer provide health insurance.

"There are a lot of options on how to get there," Boehner said.

While the fiscal cliff talks include “the normal political theater” of Washington, Geithner told NBC’s “Meet the Press” that he thinks a deal will be reached before Jan. 1, to avert a combination of $600 billion worth of automatic tax increases and spending cuts from occurring that experts say would send the economy back into recession.

Geithner’s Sunday appearances are part of the administration's efforts to build public support for the Democrats’ position in the negotiations. Obama has made campaign-style appearances, including visiting a Pennsylvania toy factory on Friday where he portrayed Republicans as scrooges at Christmas time. While breaking no new ground on the Obama administration’s position on Sunday, Geithner repeatedly urged Republicans to provide their own plan.

"They said they’re prepared to raise revenues but haven’t said how, or how much, or who should pay," Geithner said on NBC.

Washington Editor and D.C. Bureau Chief Eric Pianin is a veteran journalist who has covered the federal government, congressional budget and tax issues, and national politics. He spent over 25 years at The Washington Post.